Outsourced Policy. Real-World Costs.
It pains me to say this; Labor and the unions are exceptionally effective at this kind of thing.
Not loud or obvious and most certainly not debated in the open, but technical, fast-moving, and buried just deep enough that by the time anyone realises what’s happened… it’s already law.
That is exactly what has just occurred. A good old-fashioned stitch-up with economy-wide consequences.
In less than three weeks, a decision with such consequences was conceived, executed, and imposed on every business in Australia that relies on road transport.
And now you are paying for it. Fortnightly and indefinitely.
The Road Transport Contractual Chain Order
It’s not by accident that the unelected Fair Work Commission can now make significant, economy wide orders at lightning pace and with very little consultation.
The Albanese Government first built the mechanism through its “Closing Loopholes” industrial relations amendments handing the Fair Work Commission the power to reach deep into commercial supply chains and impose binding cost obligations. Now we truly understand what they meant by ‘closing loopholes’ – it doesn’t close loopholes, rather, it closes scrutiny.
That one alone was significant, but you also need to remember this is just one of more than 61 far reaching IR amendments they have made in just 4 years.
In this change though, at least there was a safeguard of a 6 to 12 month minimum process before any such order could take effect.
Alas, that safeguard was deliberately removed in early April, as new legislation was rushed through Parliament in a matter of days. It stripped away the minimum timeframe and replaced it with whatever the Commission considered “reasonable.”
What did “reasonable” mean?
I’ll let you be the judge, but an application was lodged by the Transport Worker Union to the Commission on 2 April, and a decision was imposed on the entire economy by 20 April.
Eighteen days.
This is what outsourcing economic policy now looks like.
Within that window, businesses were handed more than 2,400 pages of material and given less than 48 hours to respond. Then when the notice of intent and draft order was published on 14 April, submissions were directed to close at 12 noon on the 17th - all of 66 hours consultation.
The Australian Chamber of Commerce and Industry called the proposal “deficient, commercially unworkable, and likely to generate substantial unintended consequences.” The Australian Industry Group warned that manufacturers already under pressure would be hit twice - first by their own energy cost increases, then again through mandatory freight bill increases.
And the final decision? It wasn’t made by Parliament. It wasn’t made by elected officials. It was made by an unelected “expert” panel of three.
One of those members was a former chief legal adviser to the very union - the Transport Workers’ Union - that brought the application.
A major, economy-wide decision affecting prices, contracts, and supply chains handed to a small, unelected group, operating at speed, with minimal scrutiny.
The Fair Work Commission is not a regulator or an economic agency. It was designed to resolve workplace disputes and set award conditions and is now, by design of the legislation, making decisions that function as economy-wide price controls: affecting supply chains, construction costs, grocery prices and commodity farmers on a three-week timetable.
The fact that an institution of this kind now holds these powers, exercisable at union request with days of consultation, should concern anyone who believes economic policy should be made by people who are accountable to voters.
The Effects of the Order
As of this week, if your business receives goods by road, you are now part of what the law calls a “road transport contractual chain.”
In practical terms, that means this: every fortnight, you must compensate transport providers for increases in diesel prices - regardless of what your contracts say, and regardless of whether you can pass those costs on.
No transition period.
No meaningful exemption.
And no guarantee the money reaches the owner-drivers this was supposedly designed to help.
The order is sold as emergency relief, but it has no sunset clause and runs until diesel falls below $2.00 a litre, which on the modelling provided by Treasury says could take three years.
The Australian economy is now locked into a fortnightly cost escalator with no off switch in sight.
If you are a builder on a fixed-price contract, you have to absorb it.
If you are a farmer competing in global markets, you have to absorb it.
And this isn’t a one-off as it is a rolling, fortnightly escalation where every two weeks, the system resets and the cost ratchets higher.
This is not targeted relief.
There is a genuine problem facing owner-drivers who are under enormous pressure with some even leaving the industry.
But what has been delivered is a blunt, economy-wide cost mechanism that treats a multinational freight company exactly the same as a single owner-driver. Wesfarmers proposed a formal distinction that large transport businesses above $1 billion in revenue should share rather than fully recover costs. The Commission did not adopt it.
This order guarantees cost increases but it does not guarantee the right people benefit.
This will be inflationary.
This is not happening in a vacuum. Inflation in Australia is already elevated relative to many comparable economies and interest rates are rising again.
Businesses and households are already under pressure, add into that environment, this decision which injects a built-in mechanism to push costs higher across the entire economy. It is a standing cost escalator - embedded in the economy for the foreseeable future.
The bottom line
This is the new operating model of the Albanese Government.
The Government sets up the mechanism. The union pulls the trigger. The Commission fires the shot.
Australian businesses are left to count the cost.
